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eNaira Circulation Rose by 302% in Nine Months, Reflecting Increased Adoption Rate

By
Ojukwu Emmanuel
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0

A recent report by the Central Bank of Nigeria (CBN) has disclosed that the value of eNaira in circulation rose by 302 percent in nine months to N10.26 billion at the end of September 2023, reflecting an increase in the adoption of the Digital currency.

Analysis of the CBN data on Currency in Circulation from the quarterly statistical bulletin for the third quarter (Q3) 2023, revealed that the value of eNaira in circulation rose sharply by 302 percent in nine months to N10.26 billion at the end of September 30th, 2023, 9M’23 from N2.55 billion at the end of 2022, 9M’22.  

The increase represents 131 percentage points higher than the 171 percent increase recorded in the same period of 2022. Further analysis showed that eNaira in circulation recorded quarter-on-quarter, QoQ growth of 90 percent, 48 percent, and 43 percent in the Q1’23, Q2’23, and Q3’23 respectively.

Notably, the Apex bank disclosed that the surge in eNaira adoption was driven by transactions via the USSD channels. The volume and value of eNaira transactions via the USSD channel are reported to have risen by 92.95 percent year-on-year, (YoY) and 120.93 percent in 9M’23 respectively, while the number of merchants accepting eNaira also rose 11.97 percent during the same period.

Recall that the CBN last year, announced the development of eNaira enhanced services to address challenges faced by unbanked Nigerians. This saw the apex bank roll out the unstructured supplementary service data (USSD) code *997*50# to enable users to carry out all banking transactions.

Through the code, users can send funds to an ATM directly from their wallets and withdraw cash without needing a bank account. Also, users can fund their wallets by purchasing vouchers which function like GSM-recharge cards, or fund their wallets via a web portal using the debit cards issued by traditional banks.

The apex bank believed that the introduction of the USSD code would help to improve financial inclusion, increase cross-border transactions, and diaspora remittances, and also to complement payment infrastructure, which is the purpose of the e-Naira per the CBN’s cashless policy.

The CBN launched the eNaira, on October 25, 2021, making Nigeria the first African country to launch a CBDC and one of the five countries in the world to adopt the technology. Interestingly, the launch came seven months after cryptocurrency transactions were banned in Nigeria.

The main reason for the launch of the eNaira was to promote financial inclusion, increase cross-border transactions, facilitate diaspora remittances, and complement existing payments systems.

Since October 2022, the number of e-Naira wallets has reportedly increased more than 12-fold to 13 million. There was also a 63% increase to N22 billion (US$48 million) in the value of transactions in 2023.

EigenLayer TVL close to $6B after temporary Marketcap removal

By
Paul Ugbede Godwin
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0

EigenLayer, the decentralized protocol for layer 2 scaling solutions, has announced that its total value locked (TVL) has reached nearly $6 billion after it temporarily removed the cap on its deposits. This is a remarkable achievement for the project, which aims to provide fast, cheap and secure transactions for various DeFi applications.

The cap removal was a response to the high demand from users who wanted to migrate their assets from Ethereum to EigenLayer, which uses optimistic rollups to reduce gas fees and latency. The cap was initially set at $50 million per week, but it was quickly reached by eager depositors. To accommodate the growing demand, EigenLayer decided to remove the cap for 48 hours, starting from February 10 at 12:00 UTC.

The result was a massive influx of liquidity into the protocol, as users deposited over $5.9 billion worth of ETH, USDC, DAI and other tokens. According to DeFi Pulse, Eigen Layer’s TVL jumped from $271 million on February 9 to $5.96 billion on February 12, making it the third largest DeFi protocol by TVL, behind only Maker and Aave.

Eigen Layer’s co-founder and CEO, Dr. Alice Chen, expressed her gratitude and excitement for the community’s support in a blog post. She said:

“We are overwhelmed by the enthusiasm and trust that our users have shown us. This is a clear sign that the DeFi space is hungry for scalable solutions that can handle the increasing volume and complexity of transactions. We are proud to offer such a solution with EigenLayer, which leverages the security and decentralization of Ethereum, while enhancing its performance and user experience.”

Dr. Chen also assured the users that the cap removal was a temporary measure, and that EigenLayer will resume its gradual and controlled launch process soon. She explained that the cap was necessary to ensure the stability and security of the protocol, as well as to comply with the regulatory requirements in different jurisdictions. She added:

“We are working hard to make EigenLayer accessible to everyone, but we also have to be careful and responsible. Scaling Ethereum is not a trivial task, and we have to take into account various technical, legal and economic factors. We appreciate your patience and understanding as we navigate this complex landscape.”

EigenLayer is one of the most anticipated projects in the DeFi space, as it promises to solve some of the most pressing challenges that Ethereum faces today. By using optimistic rollups, EigenLayer can process thousands of transactions per second, with near-instant finality and minimal fees. This makes it ideal for applications that require high throughput and low latency, such as decentralized exchanges, lending platforms, gaming and NFTs.

EigenLayer also offers a seamless user experience, as it allows users to interact with their favorite DeFi apps without leaving their wallets or changing their addresses. Users can simply deposit their assets into Eigen Layer’s smart contracts, and then use them on any compatible app on Eigen Layer’s network. When they want to withdraw their assets back to Ethereum, they can do so with a simple click of a button.

EigenLayer is not only compatible with Ethereum, but also with other layer 1 blockchains that support EVM-compatible smart contracts, such as Binance Smart Chain, Polygon and Avalanche. This means that users can enjoy cross-chain interoperability and access a wider range of DeFi opportunities across different ecosystems.

EigenLayer is currently in its beta phase, and it plans to launch its mainnet in Q2 2024. The project has already secured partnerships with some of the leading DeFi projects, such as Uniswap, Compound, Aave, Synthetix and Curve. It has also raised over $40 million in funding from prominent investors, such as Andreessen Horowitz, Polychain Capital, Paradigm and Coinbase Ventures.

EigenLayer’s vision is to become the ultimate layer 2 scaling solution for DeFi and beyond. By offering fast, cheap and secure transactions for any application on any blockchain, EigenLayer aims to unlock the full potential of decentralized finance and enable mass adoption.

Design thinking and Innovation at Tekedia Institute

By
Ndubuisi Ekekwe
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Join us tomorrow at Tekedia Mini-MBA for a lecture on Design Thinking and Innovation by SAP’s Aderinola Oloruntoye. Design thinking is a problem-solving technique that involves a mix of creative thinking and hands-on testing. Largely, it is a non-linear, iterative process that’s most useful for solving complex or unknown problems. When you have a great design thinking framework in your organization, you will see a regime of innovation.

At Tekedia Institute, our innovation equation is:

Innovation = Invention + Commercialization

With design thinking, the correlation between the idea and the market needs becomes stronger. Join us tomorrow as the academic festival continues.

European Union has finally reached a compromise on how to reform its Fiscal Rules

By
Paul Ugbede Godwin
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0

After months of tense negotiations, the European Union has finally reached a compromise on how to reform its fiscal rules, which were suspended during the pandemic. The new rules aim to give more flexibility and room for investment to member states, while ensuring fiscal sustainability and avoiding excessive debt.

The agreement came after a heated dispute between France and Germany, the two largest economies in the bloc, over the role of the European Commission in enforcing the rules. France wanted more discretion for the Commission to take into account the specific circumstances of each country, while Germany insisted on strict and automatic criteria to trigger corrective measures.

The compromise, which was endorsed by the finance ministers of the 27 EU countries on Tuesday, preserves the main pillars of the existing rules, such as the 3% limit on budget deficits and the 60% limit on public debt. However, it also introduces some changes, such as:

A new “investment clause” that allows countries to exclude some public spending on green and digital projects from the deficit calculation, as long as they respect the debt limit and have a clear plan to reduce their debt over time.

A new “simplification clause” that enables countries to temporarily deviate from the adjustment path towards the medium-term budgetary objective, which is a country-specific target for the structural balance that ensures fiscal sustainability. The deviation is allowed if it is justified by exceptional circumstances, such as a severe economic downturn, a natural disaster, or a health emergency.

A new “matrix” that links the required fiscal adjustment to the level of debt and the economic conditions, with more differentiation across countries and more room for judgment by the Commission. The matrix replaces the previous complex system of benchmarks and indicators that were often criticized for being too rigid and opaque.

The new rules are expected to enter into force in 2023, after the EU’s general escape clause, which was activated in March 2020 to allow massive fiscal stimulus in response to the Covid-19 crisis, is deactivated. The Commission will also review the new rules in 2024 to assess their effectiveness and propose further changes if needed.

The reform of the fiscal rules is a crucial step for the future of the European project, as it will ensure that the member states pursue sound and responsible fiscal policies that support economic stability and convergence, while also fostering social cohesion and environmental protection.

The reform will also enhance the credibility and legitimacy of the European fiscal framework, which has been often criticized for being too complex, rigid, and ineffective.

The compromise reached by the EU is not perfect, and it may not satisfy all the preferences and expectations of the different stakeholders. However, it is a balanced and realistic solution that reflects the diversity and complexity of the European reality, as well as the common interest and vision of the European family.

It is a sign of maturity and solidarity that shows that the EU is capable of overcoming its differences and finding common ground on key issues that affect its present and future.

Decentralized Finance (DeFi) needs more Decentralization

By
Paul Ugbede Godwin
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0

DeFi, or decentralized finance, is a term that encompasses a variety of applications and protocols that aim to provide financial services without intermediaries. DeFi has been growing rapidly in the past few years, attracting billions of dollars in value locked and millions of users.

However, DeFi is not without its challenges and limitations. One of the most pressing issues facing DeFi is the degree of decentralization that it can achieve.

Decentralization is a core principle of DeFi, as it promises to reduce the risks of censorship, fraud, corruption, and single points of failure. Decentralization also enables greater transparency, accountability, and innovation in the financial sector.

However, decentralization is not a binary concept, but rather a spectrum that varies across different dimensions. For example, some DeFi protocols may be more decentralized in terms of governance, while others may be more decentralized in terms of infrastructure or security.

One of the questions that arises from this discussion is how can we measure decentralization? How can we quantify and compare the degree of decentralization that different DeFi protocols have? This is not an easy task, as there is no universal or agreed-upon metric or framework for measuring decentralization.

Different approaches may focus on different aspects or criteria of decentralization, such as the number and distribution of nodes, the level of participation and influence of stakeholders, the degree of autonomy and coordination of agents, or the resilience and robustness of the system. Moreover, different metrics may have different assumptions, limitations, and trade-offs that affect their validity and reliability.

Therefore, measuring decentralization is a complex and multidimensional problem that requires a holistic and nuanced perspective. There is no one-size-fits-all solution or answer to this question. Rather, we need to use multiple methods and tools to assess and compare the level of decentralization that different DeFi protocols have across different dimensions and contexts.

We also need to acknowledge the limitations and uncertainties that come with any measurement approach and be transparent about the assumptions and trade-offs that we make. By doing so, we can gain a better understanding of the strengths and weaknesses of different DeFi protocols and how they can improve their level of decentralization.

The level of decentralization that a DeFi protocol can achieve depends on several factors, such as the design choices, the trade-offs, and the external constraints that it faces.

For instance, some DeFi protocols may rely on centralized oracles to provide external data, such as price feeds or real-world events. This introduces a potential source of manipulation or error that can compromise the integrity and functionality of the protocol.

Similarly, some DeFi protocols may use permissioned or semi-permissioned validators to process transactions and secure the network. This may improve scalability and efficiency, but at the cost of reducing the diversity and autonomy of the participants.

Therefore, DeFi needs more decentralization in order to fulfill its vision and potential. More decentralization can enhance the resilience, trustlessness, and permissionlessness of DeFi, as well as foster more innovation and competition in the space. However, more decentralization is not a simple or straightforward goal.

It requires careful analysis and evaluation of the trade-offs and challenges involved in each case. It also requires constant experimentation and improvement to find the optimal balance between decentralization and other desirable properties, such as usability, performance, and security.

DeFi is a revolutionary movement that aims to democratize and disrupt the traditional financial system. However, DeFi is still in its early stages and faces many obstacles and limitations. One of the most important issues that DeFi needs to address is how to achieve more decentralization across its various aspects and dimensions.

More decentralization can bring more benefits and opportunities to DeFi users and developers, but it also entails more complexity and responsibility. Therefore, DeFi needs more decentralization, but not at any cost.

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